No one likes uncertainty: Here's how Trump's proposed tariffs on Canadian lumber will impact the Berkshires' housing market

No one likes uncertainty: Here's how Trump's proposed tariffs on Canadian lumber will impact the Berkshires' housing market

  • 16.03.2025 18:39
  • berkshireeagle.com
  • Keywords: tariffs, uncertainty

Trump's proposed tariffs on Canadian lumber have created uncertainty in the Berkshires' housing market, potentially raising building material costs and slowing development. Local lumber companies are adjusting by adding disclaimers to contracts, warning customers of potential price hikes.

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Estimated market influence

Dresser Hull Lumber and Building Supply Co.

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Analyst rating: N/A

The company is facing uncertainty due to potential tariffs, leading to price changes and customer concerns.

Fairview Millwork

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Analyst rating: N/A

They are updating contracts to include tariff disclaimers, which may lead to increased costs for customers.

Northeastern Retail Lumber Association

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Analyst rating: N/A

The association is expressing concerns about the impact of tariffs on lumber prices and the housing market.

rk MILES

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Analyst rating: N/A

They are experiencing disruptions in their business due to potential price hikes from suppliers.

Duke's Lumber and Hardware Contracting Supplies

Negativesentiment_dissatisfied
Analyst rating: N/A

The company is receiving warnings of potential price increases from vendors, which could affect their pricing strategy.

Context

Analysis of Trump's Proposed Tariffs on Canadian Lumber and Market Implications

Overview

  • Proposed Tariff: 25% tariff on Canadian lumber, expected to go into effect April 2.
  • Industry Impact: Affects lumber and building supply companies in the Northeast, particularly Massachusetts and New Hampshire.
  • Market Volatility: Companies are struggling with price fluctuations, order cancellations, and uncertainty due to delayed tariff implementation.

Business Impacts

  • Small Businesses:

    • Fairview Millwork: Added disclaimers to contracts to pass on tariff costs to customers.
    • rk MILES: Experiencing disruptions in pricing for lumber and metal building parts.
    • Duke’s Lumber: Suppliers warn of potential price hikes (5-40% increase in April).

  • Cost Pass-through:

    • Companies cannot absorb additional costs, forcing them to pass tariff-related expenses to customers.

Market Trends

  • Lumber Prices:

    • Already elevated due to the COVID-19 pandemic.
    • Tariffs could increase material costs for single-family homes by $7,500-$10,000 (NAHB estimate).

  • Housing Market Concerns:

    • Sluggish housing market may grind to a halt due to higher building material prices.
    • Developers face challenges in offsetting construction cost increases through rent or sale price adjustments.

Competitive Dynamics

  • Small vs. Large Chains:

    • National chains like Home Depot and Lowe’s have greater resources to navigate tariffs.
    • Small, family-owned businesses rely on community trust and word-of-mouth, risking reputation with price changes.

  • Supplier Strategies:

    • Suppliers are adjusting pricing frequently (twice a month or more) due to market volatility.

Long-Term Effects

  • Investment Deterrence:

    • Uncertainty may delay housing projects and slow investment in much-needed affordable housing.
    • Investors hesitate to commit without clarity on future material costs.

  • Construction Costs:

    • Material costs have risen by 40% over the past five years, exacerbating affordability issues in rural areas like the Berkshires.

Regulatory Considerations

  • Trade Dependency:

    • The Northeast is uniquely dependent on Canadian lumber imports (30% of U.S. softwood lumber).
    • Massachusetts imported $279 million in wood and semifinished wood products in 2023.

  • Government Concerns:

    • State officials worry about the impact on housing development and construction costs, calling for urgency in addressing the situation.

Conclusion

The proposed tariffs on Canadian lumber are creating significant challenges for small businesses, disrupting supply chains, and threatening the stability of the housing market. The Northeast’s reliance on imported lumber, combined with rising material costs, poses a critical risk to affordable housing development and economic growth in the region.